If the final income tax assessment shows that you will receive a refund or will have to pay an additional amount the tax office will also calculate interest. The interest rates applying in 2007/2008 are:

1 st quarter 2007: 4.7%

2 nd quarter 2007: 5.0%

3 rd quarter 2007: 5.25%

4 th quarter 2007: 5.4%

1 st quarter 2008: 5.3%

Saving money with the tax office can therefore be beneficial, where else will you get such a high interest? On the other hand you can borrow money from the tax office against a relatively low interest but don’t forget you will have to pay it all in one amount. If you want to minimize the amount of interest you can request the tax office to issue a provisional tax assessment, which can already be done during the year.